Operating Income impact

Require assistance in calculating operating income impacts.

The following product line information is for the Home Deal Company. The company is considering dropping its Children's product line due to poor operating income performance. Fixed expenses are allocated to each product line based on sales revenue.

Required:
A) Calculate the effect on the Home Deal's operating income if the Children's active wear clothing line is discontinued. Comment on your analysis.
B) Assume Home Deal's discontinues its Children's active wear clothing line, calculate the total operating income.

Solution Preview

Require assistance in calculating operating income impacts.

The following product line information is for the Home Deal Company. The company is considering dropping its Children's product line due to poor operating income performance. Fixed expenses are allocated to each product line based on sales revenue.

............................................Active Wear Clothing ...

Solution Summary

Solution helps in calculating the effect on the Home Deal's operating income if the Children's active wear clothing line is discontinued

Use the appropriate information from the data provided below for the year ended December 31, 2009 to calculate the following:
a. Operatingincome
b. Income from continuing operations
c. Net income
Cost of goods sold $11,700
Gen and admin expenses $48,000
Net cash provided by financing activities $69,000
Dividen

An investment banker is analyzing two companies that specialize in the production and sale of candied apples. Old-Fashion Apples uses a labor-intensive approach, and Mech-Apple uses a mechanized system. CVP income statements for the two companies are shown below. Sales- $396,100 (OFA) $396,100 (MA); Variable costs- $284,

Cheaney Corporation owns a number of cruise ships and a chain of hotels. The hotels, which have not been profitable, were discontinued on September 1, 2008. The 2008 operating results for the company were as follows.
Operating revenues $12,878,000
Operating expenses 8,744,000
Operatingincome $ 4,134,000
Analysis disclos

Please help with the following problem.
Currently a firm has $1 million in 10% debt. The firm also has 50,000 shares outstanding that sell for $40 each. The firm used the $1.0 million to repurchase stock, as they previously were an all equity firm. Three states of the economy are possible: a slump under which the firm would